Once you have accumulated some wealth, it’s understandable to pick one investment type you feel most comfortable with. Some people see shares as the winning option, others like bricks and mortar, or prefer the perceived safety of term deposits and savings accounts.

It is important to remember that all of these investment options carry their own potential pitfalls. As we’ve seen in the past few years, stock markets can crash. The housing market nosedives every so often, and interest rates are unpredictable: if you’ve incredibly unlucky, you may even pick a bank that goes under.

This is why it makes better financial sense to distribute your wealth across a range of investments, rather that putting all your eggs in the one basket. If you are less reliant on one market, you will be less affected when one is in trouble. And there are unpredictable peaks and troughs in all markets.

Even within shares, for instance, it is wise to diversify your portfolio across a range of sectors, for example utilities, IT, consumer staples and energy, lest one or a few take a downturn.

Managed funds can help you to diversify your investments and help you to optimise your wealth. The experts at Finstyle will be able to talk through your options and what will best suit your circumstances, investment strategy and goals.

Disclaimer: The postings on this site are my own and don’t necessarily represent the views or opinions of Total Financial Solutions Australia (AFSL# 224954)

This information does not take into account the reader’s objectives, financial situation or needs. For this reason, before you act on this advice, you should consider the appropriateness of the advice taking into account your own objectives, financial situation and needs. Before you make a decision about whether to acquire a financial product, you should obtain and read the product disclosure statement.

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